#1WATERLOO BREWING Ontario's First Craft Brewer 35 Years of Brewing Success Laurentian Investor Presentation March 2019#2Disclaimer and Forward-Looking Statements All statements in this presentation that do not directly and exclusively relate to historical facts constitute forward-looking statements as of the date of this presentation. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "estimate", "intend", "anticipate", "seek”, “plan”, “believe”, “continue” or the negatives of these terms or variations of them or similar terminology. Although the Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements, which are not guarantees and are subject to certain risks, uncertainties and assumptions, which may cause actual performance and financial results to differ materially from such forward-looking statements. The forward-looking statements included in this presentation are made only at the date of this presentation and, except as required by applicable securities laws, the Corporation does not undertake to publicly update such forward-looking statements to reflect new information, future events or otherwise. 2 WATERLOO0 -BREWING-#3Today's Presenters PALS W ·· wwwwwww ATI PREMIUM George Croft President & CEO With Waterloo Brewing for 11 years Prior Experience / Board Membership: Board Director - The Beer Store (3 years) Chairman of the Board - Beer Canada (2 year) President and COO - Lakeport Brewing (2 years) BEER WATERLOO0 -BREWING STORE President - Labatt Breweries of Ontario / AB InBev (21 years) Labatt BEER CANADA Cheers, Canada 노 LAKEPORT BREWING CORPORATION With Waterloo Brewing for 10 years Russell Tabata Prior Experience: COO Chief Technical Officer - Lakeport Brewing (6 years) Director of Operations, Director of Process Improvement - Molson Coors Brewing (13 years) h LAKEPORT BREWING CORPORATION WATERLOO -BREWING MOLSON Coors David Birch CFO With Waterloo Brewing for 3 years Prior Experience: Vice President (Finance and Administration) - McClelland Premium Imports (4 years) Labatt and AB InBev (15 years) Director of Finance and Performance Supply Chain - Labatt Canada Vice President of Commercial Finance InBev USA WATERLOO -BREWING- McClelland Premium Imports Ingen an de Wald AB InBev Labatt 3 WATERLOO0 -BREWING-#4Table of Contents Executive Summary Key Investment Highlights Appendix Section | III = WATERLOO0 -BREWING-#5I. Executive Summary#6Executive Summary Our Background Founded in 1984, Waterloo Brewing is a publicly traded Canadian beer, ready-to-drink ("RTD"), cider and co-pack beverage company Went public in 1986 and is currently traded on the Toronto Stock Exchange (TSX: BRB) Shareholder Summary(1) Our Business We brew and blend high quality beers, RTDs and cider products in our flexible state of art facility in Kitchener, Ontario We produce all products for our owned brands and co-pack customers Our long-term strong organic growth is driven by expansion of our owned brands and co-pack business FY18A Gross Revenue ☐ (C$ in millions, except per share values) Our Markets We sell our products primarily in Ontario, with coverage across Canada and into parts of the U.S. We sell mainly through The Beer Store, a brewer-owned Ontario retail business In Ontario, craft beer has legally protected shelf space at retail Legalization of cannabis in Canada is anticipated to drive growth in cannabis-infused beverages ("CIBS") FY18A Gross Revenue by Channel Co-Pack 9.4% Other 38.4% Insiders 37.7% Management 5.3% Institutional 18.6% Capitalization Table Share Price (3/19/19) Fully Diluted Shares Outstanding (mm) Equity Value (2) 0.8% 2.6% 2.9% 25.0% Owned Brands 90.6% 68.8% The Beer Store ■LCBO ■Grocery ■Retail ■ Other Operating Performance and Trading Multiples $4.06 35.4 LFY $144 Owned Brands Volume (HL) 238,100 FY19E 238 to 240 YoY Growth (%) FY19E Multiple 0.5% 13.86 Net Revenue (1.1) SM&A $49.1 $9.1 $49.5 to $50.2 1.9% 2.7x $9.0 to $9.2 0.0% $13 EBITDA (excl. one-time costs) $8.8 $9.8 to $10.1 12.4% 13.5 $157 Net Income $2.6 $2.7 to $2.9 3.8% 44.7 Plus: Debt Less: Cash & Cash Equivalents Net Debt Enterprise Value Note: Waterloo Fiscal Results exclude the Formosa brands sold by Waterloo in FY18A (1) (2) As of 18/01/19. Management refers to the share ownership of George Croft (CEO), Russell Tabata (COO), David Birch (CFO) Includes C$3mm equipment lease 6 WATERLOO0 -BREWING-#7II. Key Investment Highlights#8Key Investment Highlights 1 Flexible, State-of-the-Art and Expandable Production Facility WATERLO0 2 Well-Positioned for North American Non-Alcoholic, CIB Opportunity 3 Multiple Avenues for Continued Strong Organic Growth 4 Strong and Diverse Portfolio of Compelling Owned Brands BREWING 5 Consistent Record of Co-Pack Growth Offsetting Fixed Costs 6 Advantaged Regulatory Framework for Craft Beer Sales in Ontario Strong, Sustainable Financial Performance 8 High Quality Management Team with Significant Beverage Industry Experience 8 WATERLO0 -BREWING-#91 Flexible, State-of-the-Art and Expandable Production Facility Waterloo's state-of-the-art production facility is a strategic asset ensuring high quality production and consistent supply across an extensive range of liquid and packaging formats Integrated Single Source Facility Leading quality standards amongst Canadian brewers 1mm HL / yr with Future Capital Investment Capacity Extendable to Best-in-Class Brewing Technology 65-70% capacity utilization supports future growth of portfolio Extensive range of liquid production capabilities, including beer, RTDs, cider and co-pack beverages C$33mm Investment in Last 5 Years to Enhance Capability, Capacity, Safety and Quality Internationally Recognized Certification for Food Safety (GFSI-FSSC 22000) WATERLO0 -BREWING Kitchener, Ontario, Canada Non-unionized Employee Base of ~140 New and Flexible, Higher Capacity Canning Line 250K HL Available Capacity to Support Volume Growth Wide range of packaging production capabilities, including bottles, cans and kegs 9 WATERLOO0 -BREWING-#101 Flexible, State-of-the-Art and Expandable Production Facility Waterloo's facility is a competitive advantage that allows the Company to produce a broad range of products Equipment / Facility Leadership / People Capability / Quality / Safety ☐ Differentiators State-of-the-art technology is flexible and regularly produces a wide variety of beverages including beers, RTDs, cider and co-pack beverages Anticipating extension of this capability into the development and production of CIBS, expected to become legal in Canada in October 2019 after the publication of federal regulations Waterloo's team has expertise in successfully developing and producing new beverages Examples include Grapefruit Radler, Oktoberfest Festbier and Salted Caramel Porter Understand the high quality necessary for new product introductions Invested C$33mm in capacity, capability, safety and quality improvements Certified under the internationally recognized Global Food Safety Standard (GFSI-FSSC 22000) Large brewers rely on these standards when awarding co-pack business Geographic Presence Size / Capacity Speed to Market Waterloo is located in an ideal geographic location to service and support the high population areas of Ontario and Quebec and eventually the U.S. Ontario represents 98.6% of Waterloo's FY18A revenue and 38.7% of Canada's population Waterloo's facility has optimal flexibility and scale for success as a licensed CIB manufacturer Available production capacity allows Waterloo to scale up for widespread national production of multiple products Expandable to further increase plant capacity to 1mm HL / year Waterloo's team produces multiple new products each season and has the experience to develop, manufacture and distribute CIBS Already working on cannabis R&D and processing licenses and supply agreement with a federally licensed partner 10 WATERLOO0 -BREWING-#112 Well-Positioned for North American Non-Alcoholic, CIB Opportunity CIBS have the potential to fundamentally change the consumer beverage landscape; they could form a multi-billion dollar market if consumers treat them as substitutes for alcoholic beverages (US$ in billions) Cannabis Activity in 2017 and 2018 There has been a recent flurry of deals in the cannabis sector - companies of varying sizes are acquiring capabilities to develop products across the health, vaping, edible and infused-beverage sectors October: Constellation announced C$245mm investment in Canopy Growth for a 9.9% stake June: U.S. FDA approved GW Pharma's Epidolex, the first drug that contains CBD Novartis July: Heineken-owned Lagunitas launched a THC-infused sparkling water (Hi-Fi Hops) August: Constellation announced an additional C$5bn investment in Canopy Growth for a 38% stake Heineken Constellation Brands Anheuser-Busch InBev 2017 $42bn Constellation Brands 2018 Imperial Brands $213bn $35bn $57bn $4bn GW Pharma March: Novartis formed a strategic alliance with Tilray to develop new cannabis-based medications June: Imperial Brands invested in Oxford Cannabinoid Technologies, a biopharmaceutical company $14b Molson Coors Pharma Tobacco Beverages Sources: Factset, Company press releases Note: Bubble size and dollar amount represent approximate market capitalization (US$) as of announcement date 11 $40bn $102bn $119bn Altria December: Altria announced C$2.4bn investment in Cronos Group for a 45% stake August: Molson Coors announced a JV with Hydropothecary Corp to develop CIBS in Canada December: ABInBev formed a partnership with Tilray to research non-alcoholic, cannabis-infused beverages. Each partner will initially invest $50mm US in the effort WATERLOO0 -BREWING-#122 Well-Positioned for North American Non-Alcoholic, CIB Opportunity Waterloo has engaged professional consultant Cannabis Compliance Inc. and is undertaking multiple processes simultaneously to be ready for launch in October 2019 1 Production Facility Construction: Receive foundation permits, conduct system trials, conduct sensory evaluations, finalize procedures and train staff 2 Cannabis R&D License: Submit license application, develop site floor plan, prepare research protocol, receive R&D license 3 Cannabis Standard Processing License: Submit license application, complete security protocols, develop business model, secure lab for analysis, receive Processing License 1 3 5 Dec Jan 2018 2019 Feb 2019 Mar 2019 Apr 2019 May Jun Jul Aug Sep Oct 2019 2019 2019 2019 2019 2019 2 4 6 4 5 Review Route to Market for CIBS: Apply for and submit samples to product calls, establish launch volume, confirm delivery model/carrier Develop flavours for CIB: Research opportunities, secure source for product, conduct internal trials, finalise formats and formulations, conduct review, create samples 6 Production: Conduct liquid and packaging initial production. 12 WATERLOO0 -BREWING-#133 Multiple Avenues for Continued Strong Organic Growth Waterloo's investments in infrastructure, sales and marketing allow the company to amplify multiple organic growth opportunities Branded Volume Expansion Owned brand volume growth has outpaced the market as new products and packaging, supported by facility upgrades, are highly regarded by consumers Waterloo's focus on quality and authenticity has allowed its brands to stand out against a backdrop of limited price competition Sales promotions and seasonal offerings, like Oktoberfest Brew, have supported strong year- round growth in owned brands Co-Pack Growth CIB Opportunity Co-pack business is a competitive advantage supported by management expertise in developing and bringing to market a wide variety of beverages Positioned for growth as Waterloo's flexible production facility, new canning line and expanded brewing capabilities allow for superior customization and speed to market Provides portfolio diversification, manages risk and allows Waterloo to enter new beverage product markets Ongoing investments in NA beverage manufacturing have prepared Waterloo to seize a first mover advantage in the nascent CIB market Waterloo is aggressively pursuing the opportunity for licenses to develop and process cannabis- infused products North American recreational cannabis market estimated to be ~$19bn. The CIB market is estimated to total ~$3bn in 2019 and quickly grow to take a larger portion of the market with the potential to fundamentally transform the beer industry Fixed Cost Leverage Waterloo's FY18A facility consolidation in Kitchener provides for more efficient absorption of fixed costs and improves the company's margin profile Co-pack business efficiently utilizes excess capacity, further spreading fixed costs while growing revenues Source: Wall Street research 13 WATERLOO0 -BREWING-#144. Strong and Diverse Portfolio of Compelling Owned Brands Waterloo's portfolio covers a wide range of alcoholic beverages and is well-positioned in the attractive, growing sub-segments of both premium and value beer Top Brands WATERLO0 BREWING Superior Ontario Craft Beer at a Reasonable Price High quality, simple core beer styles with seasonal offerings 17 SKUs Serves growing consumer demand for seasonal beers, particularly in the summer Numerous local and global brewing awards Volume +0% in F19 Q3 10% of F19 Owned Brands volume New packaging launch well received Sells in cans and bottles National expansion opportunity LAKER The Best Value in Value Beer Well-positioned value beer ► 19 SKUs FY19A packaging redesign delivering positive growth ▸ Effective marketing includes in-case sales promotions Volume +1% in F19 Q3 74% of F19 Owned Brands volume Leading consumer offerings: 473 mls single cans ► 24 pack bottles LANDSHARK Lager PREMIUM DUALITY Premium Beach Beer Exclusive long-term Canadian license for LandShark Lager and Margaritaville 9 SKUs Launched in Canada in spring 2016 ■Potential for expansion into CIBS with Jimmy Buffett Coral Reefer RTD Volume (LandShark and Margaritaville) +2.5% in F19 Q3 11% of F19 Owner Brand volume National expansion opportunity Core WATERLO WATERLO WATERLO WATERLO DARK 235 AMBER 214 PILSNER 246 Seasonal WATERLOO WATERLOO Note: Volume data excludes the Formosa brands sold by Waterloo in FY18A LAKER LAKER AKER LAGER LAKE LIGHT LAKER AKER LIGHT GHT LAKER ICE 14 LAKER AKER ICE LAKE LAKER AKER LANDSHARK 22 Kager LANDSHARK LURGELER LANDSHARK WATERLOO0 -BREWING#15сл 5 Consistent Record of Co-Pack Growth Offsetting Fixed Costs Waterloo's co-pack business is a competitive advantage as it spreads fixed costs and contributes to scale and efficiency; the co-pack business grew by 26% in FY18A, on top of 20% growth in FY17A Overview Co-packing brings diversification and reduced risk against branded portfolio performance Recent capital upgrades to Waterloo's canning line (doubled capacity) have fostered co-pack revenue growth 200K HL capacity in F18 with plan to expand to 450K His capacity in F20 Consumer demand for cans is growing Actively pursuing opportunities to grow existing co-pack agreements and secure new co-pack customer relationships Global Food Certification ("GFSI"), packaging flexibility, and effective execution provide competitive advantage Continually updating production capabilities (i.e.. sleek cans) offer customers unique packaging options at competitive prices Competitive Advantages Product Expertise Speed to Market Access to Consumer Formulating new products and flavours for co- pack clients gives Waterloo expertise in product development and management Rapid production of new co-packed beverages drives higher volumes and becomes a differentiator in the nascent CIB market Waterloo serves as key gateway between large co-pack clients and their customers; it efficiently provides critical supply that co-pack clients cannot provide themselves Note: Revenue and Volume data exclude the Formosa brands sold by Waterloo in FY18A Co-Pack Volume (HL 000s) Co-Pack Revenue (C$mm) 200 Consistent Co-Pack Growth Volume 60% 3 Yr CAGR 311% 150.6 150 48% 135.0 109.0 37.9% 100 87.6 32.2% 36% 31.2% 50 24% FY16A FY17A FY18A Q319 Gross Revenue $15 25% $12 3 YR CAGR: 22.6% $10.5 20% $9.2 14.3% $9 $7.3 15% $6.1 9.5% $6 8.5% 10% 8.5% $ - FY16A FY17A FY 18A Q319 5% 15 WATERLOO0 -BREWING % of Gross Revenue % of Total Production#166 Advantaged Regulatory Framework for Craft Beer Sales in Ontario The regulatory environment in Ontario provides a competitive advantage to Waterloo due to the favourable treatment of craft brewers and de facto government backing of accounts receivable Introduction of the Grocery Channel has Provided Greater Access to Waterloo's Products In 2015, Ontario legalized beer sales in grocery stores, greatly expanding the number of retail outlets selling Waterloo's products The grocery channel is expected to grow from ~200 stores in 2017 to -450 by December 2018; has the potential to become Waterloo's largest channel Perfect Price Transparency Reduces Price Competition and Promotes Competition Based on Quality and Value Ontario beer market offers brewers perfect price transparency, with pricing across all brewers published each Monday morning The resulting price uniformity has elevated quality as a key differentiator, which plays to Waterloo's strengths Grocery Channel Expansion Accounts Receivable Price Transparency 16 Government Regulation of Beer Distribution Creates a Beneficial Accounts Receivable Dynamic The Liquor Control Board of Ontario ("LCBO") is an Ontario government enterprise that regulates the alcohol market in Ontario Accounts receivable from the sale of beer are paid to Waterloo in 10 days, benefiting Waterloo's cash and working capital position Nearly 100% of Accounts Receivable are collectible annually and bad debts are almost eliminated Protected Shelf Space Craft Brewers Are Guaranteed Shelf Space In Ontario, craft brewers are guaranteed a minimum of 20% of shelf space at The Beer Store ("TBS") In addition, craft brewers are entitled to offer two products at TBS without a stocking fee; Waterloo grandfathered into craft brewer status WATERLOO0 -BREWING-#177 Strong, Sustainable Financial Performance 3 consecutive years of strong performance with Revenue and EBITDA growth Growth Drivers Macro: Canadian craft beer market is growing while overall beer market has reached maturity Consumers now favour premium craft beers that experiment with flavours and ingredients Brand growth: Each of Waterloo's brands has grown due to increased brand awareness and availability in grocery stores which began in 2015 Cost consolidation: Waterloo sold its Formosa brands in September 2017 (FY18A); consolidated production in Kitchener is expected to drive gross margin expansion from FY19 onward Pricing: Higher revenue CAGR vs. volume CAGR for Owned Brands over the past 3 years demonstrates favourable pricing power Marketing initiatives: Volume (HL 000s) 500 Consistent Volume Growth 3 Yr CAGR: 19.1% 397.8 400 338.4 325.2 280.3 150.6 300 109.0 135.0 87.6 200 88 100 229.4 247.2 192.7 190.2 FY 16A FY17A Owned Brands FY 18A Co-Pack Brands Q319 ...With Accompanying Revenue Expansion Waterloo: Free sampling at local summer events, seasonal offerings, packaging redesign. Laker: Digital media campaign to communicate price advantages, packaging redesign in July 2018 LandShark: Free sampling at local summer events, free t-shirt in every case, cross promotion (sweepstakes to win trip to Hollywood Beach) Winter Events Note: Revenue and Volume data exclude the Formosa brands sold by Waterloo in FY18A 17 Net Revenue (C$mm) $60 $48 3 Yr CAGR: 15.7% $44.4 $49.1 $41.3 $36.7 $36 $24 $12 $ - FY16A FY17A FY18A Q319 WATERLOO0 -BREWING-#18Gross Profit (C$mm) 7 Strong, Sustainable Financial Performance Consolidation of the Kitchener and Formosa facilities (with the sale of Formosa in FY18A) led to some short term disruption and incremental costs, but will yield savings and volume expansion from FY19E onward Gross Profit(1) EBITDA (1) $24 40% 34.8% 28.6% $18 27.9% 27.8% 30% $15.5 $14.1 $11.5 $12 20% $10.2 $6 FY16A FY17A FY18A Gross Profit Q3F19 Capital Expenditure Gross Profit Margin (%) 10% EBITDA (C$mm) $12 40% $9 $8.6 $8.8 30% $7.2 $6 $5.7 19.4% 17.9% 17.5% 20% 15.6% $3 10% FY16A FY17A EBITDA FY18A Q3F19 EBITDA Margin Dividend Yield (2) Capital Expenditure (C$mm) 3 $10.7 $12 $9.5 $0.10 8% $3.5 $9 $5.1 $2.0 $6 $5.3 £ $2.0 $0.5 $1.3 $2.6 $7.2 $4.4 $1.0 $3.6 $1.6 FY16A FY17A FY18A Q3F19 Dividend Per Share (C$) 3 $0.08 $0.08 $0.07 6% $0.06 $0.06 4% 2.1% 1.8% 2.1% P$0.04 $0.02 2% 1.2% $0.02 FY16A FY17A FY18A Q3F19 Expansion Maintenance Other Note: Financial data excludes the Formosa brands sold by Waterloo in FY18A (1) (2) (3) Decline in FY18A performance due to heavy rain in Spring 2017 and the delay and complexity of facility consolidation; Waterloo outperformed industry average of 8-9% declines Increase in FY18A capex due to one-time cost of consolidating production at Kitchener facility Other includes returnable containers, computer equipment, furniture and fixtures, vehicles and spare parts 18 WATERLOO0 -BREWING- Dividend Yield (%) EBITDA Margin (%)#19Key Investment Highlights 1 Flexible, State-of-the-Art and Expandable Production Facility WATERLO0 2 Well-Positioned for North American Non-Alcoholic, CIB Opportunity 3 Multiple Avenues for Continued Strong Organic Growth 4 Strong and Diverse Portfolio of Compelling Owned Brands BREWING 5 Consistent Record of Co-Pack Growth Offsetting Fixed Costs 6 Advantaged Regulatory Framework for Craft Beer Sales in Ontario Strong, Sustainable Financial Performance 8 High Quality Management Team with Significant Beverage Industry Experience 19 WATERLO0 -BREWING-#20III. Appendix#21Industry Overview Canadian craft beer market is a growth market while the overall beer market has matured; creates an opportunity for craft brewers to take share from established players Craft Breweries Have Consistently Grown in Canada Waterloo Is Second in Share Among Regional Brewers Number of Breweries 1,000 800 600 470 390 400 200 2013 2014 CAGR: 21.9% 860 715 580 2015 2016 2017 Moosehead I Waterloo Creemore Springs Big Rock 1.3% 1.0% 0.6% 0.5% Steam Whistle 0.3% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 2017 Canada Beer Market Share by Net Revenue 1.2% 1.4% Ontario Is Canada's Largest Market, and Waterloo's Location in Ontario Is Prime for Expansion Canada is a highly profitable market for beer companies FY18A Waterloo Gross Revenue by Province (1) Ontario is the largest beer market in Canada, accounting for -35% of volume and -40% of the margin pool The craft beer market in Ontario is still underdeveloped and growing quickly Craft beer is less than 10% of volume in Ontario, compared to ~20- 30% in British Columbia and ~40% in the U.S. Pacific Northwest Ontario is the most efficient beer distribution system in Canada The large majority of Waterloo's sales are in Ontario, and it is well-positioned to expand into the U.S. Source: Euromonitor (1) Revenue does not sum to 100% due to rounding 21 Yukon 0.0% Nunavut 0.0% British Columbia Alberta 0.1% 0.4% Manitoba 0.5% Quebec 0.1% Ontario 98.6% U.S. 0.0% Saskatchewan 0.2% Newfoundland 0.1% Nova Scotia 0.0% New Brunswick 0.1% WATERLOO0 -BREWING#22Current Facility Capabilities A wide variety of liquid and packaging capabilities allows Waterloo to distribute its products into more channels and attract a larger number of co-pack clients Liquid ◉ Beer and flavoured beer derivatives Cider and flavoured cider derivatives Spirit-based alcoholic RTD beverages Malt-based alcoholic RTD beverages Non-alcoholic beer (summer 2019) Flavoured water beverages - sparkling / still, alcoholic / non-alcoholic Liquid Bottling Tea-based beverages - sparkling / still, alcoholic / non-alcoholic Bottling Various 341ml / 355ml bottle formats Returnable and non-returnable bottles Pasteurized or non-pasteurized product Body front, back and neck labeling Two basket carrier and five carton formats "Can in case" or promotional insertion for 24 pack carton Shrinkwrapping Canning Kegging Canning Kegging 355ml 473ml / 568ml can formats 20L keg format with sankey keg fitting ◉ 355ml "sleek" can format 30L keg format with sankey keg fitting Liquid nitrogen dosing for still non- carbonated products 50L keg format with sankey keg fitting 58.6L keg format with sankey keg fitting Pasteurized or non-pasteurized product ☐ Five separate hicone and tray formats Shrinkwrapping Waterloo received a renewed FSSC 2000 Food Safety System Certification in December 2018 (valid until December 2021) 22 22 WATERLO0 -BREWING-#23Current Facility Capabilities (Cont'd) Waterloo's facility features state-of-the-art equipment at each step of the production process Facility Site Filtering Blending Brewing 23 ΘΟ ΘΟ Canning MASTER CAN Cellar Centrifuge Canning WATERLOO0 -BREWING-#24Future Facility Capabilities Waterloo is investing C$12.6mm to expand its facility, enhance its operations and support continued growth, creating no disruption to its existing business Facility Expansion Overview 50,000 square foot warehouse expansion to eliminate off-site warehousing, provide full control and segregation of raw material and full goods (requirement for CIB license) 3,500 square foot production / processing expansion to allow for the development of NA beer, provide full control and segregation of raw material and full goods (requirement for CIB license) Increased Capabilities New E-cellar to allow for inexpensive expansion of Aging and Fermentation capacity NA beer 355 ml sleek can Still liquids (e.g., iced teas) Retail and Small Batch Brewhouse A larger retail store, taproom and 6500 sq.foot small batch brewhouse will be added to the brewery, greatly enhancing the craft brewery experience for visiting customers Financial Impact The project is expected to deliver over C$1.1mm annually in margin enhancement through revenue growth and operational cost savings (1) $6.4mm of warehouse expansion paid for by landlord of Kitchener facility Capacity Expansion Canning Line 400K HL / yr 450K HL/yr Can line increase from 400K HL / yr to 450K HL / yr because of increase to 500cpm on 355 ml format Expansion Capital Expenditure Capability Warehouse expansion (1) Cost $6.6 E-Cellar tank additions 4.4 NA Beer / CIB upgrades 2.7 Can palletizer and shrinkwrapper 2.6 Retail and Brewhouse 1.0 Blending system upgrade 1.0 Flash pasteurizer 0.8 $19.0 Total 24 WATERLOO0 -BREWING-#25NA Beer Buildout Waterloo has begun construction on non-alcoholic beer equipment that will serve as the basis for CIB production and will produce beverages alongside Waterloo's current brewing systems Facility Waterloo's non-alcoholic beer processing system enables the company to use standardized beer as the input The NA beer system will extract alcohol from the beer, creating a 0% ABV beverage Following the de-alcoholization process, the remaining product can further be processed through filtration and blending with flavour components to deliver a finished product with the same chacteristics as standardized beer The finished NA beverage can be filled into finished containers using the same bottle, can and kegging equipment The NA beer equipment will exist in an expanded area within the Kitchener facility and will produce concurrently with its current beer systems, creating no disruption to Waterloo's existing business Preparation for CIBS December 2018: Begin construction May 2019: Equipment delivery on site July 2019: Install and commission equipment, commence trials August 2019: Conduct trials and sensory evaluations September 2019: A Finalize NA beer product De-alcohol system Alfadose system 25 CIB Production January 2019 to April 2019: Secure liquid-infused cannabis from third party suppliers May to September 2019: Develop brand marketing plan July to September 2019: Conduct product development process October 2019: Begin CIB production and ship CIB finished goods from Waterloo facility to customers WATERLOO0 -BREWING-